WASHINGTON – Negotiations between President Biden and Senate Republicans over infrastructure reform reached a new political impasse on Friday, as the White House unveiled a slightly smaller, $1.7 trillion counter-offer that left many of its most controversial spending and tax provisions intact.
Top officials in the Biden administration shared their retooled proposal during a call earlier in the day with a half-dozen Republicans led by Sen. Shelley Moore Capito (R-W.Va.). The new offer, described afterward by White House press secretary Jen Psaki, on paper marks a decrease from the total of $2.2 trillion Biden proposed earlier this spring.
“This proposal exhibits a willingness to come down in size, giving on some areas that are important to the president,” Psaki said.
Despite changes in spending, the White House did not agree to narrow what it considers infrastructure, making it clear it still expects any bipartisan deal to include the sort of new investments in child care and education that GOP lawmakers do not support. And the Biden administration reemphasized its desire to pay for the blueprint, known as the American Jobs Plan, through tax increases on corporations – a position that Republicans also vehemently oppose.
The scope of the proposal ultimately left Capito and her counterparts frustrated on Friday. Hours after the two sides talked, GOP lawmakers described the new White House counter-offer as “well above the range of what can pass Congress with bipartisan support,” adding in a joint statement that the two sides are now “further apart after two meetings with White House staff than they were after one meeting with President Biden.”
The new stalemate threatened to end a week of once-promising negotiations on a disappointing political note. GOP lawmakers similarly have refused to budge in recent days, after Capito and her Republican allies put forward their own counterproposal on Tuesday that essentially included little new spending and virtually none of the White House’s top policy priorities.
Both sides still maintain their commitment toward working out a bipartisan accord, after Biden advanced his last economic package – a roughly $1.9 trillion coronavirus relief plan – without GOP support. But White House officials are rapidly approaching their own, self-imposed Memorial Day deadline by which they hope to see progress, injecting additional urgency into the talks at a time when Democrats and Republicans still seem far apart.
“This is the art of seeking common ground,” Psaki said.
In its new counter-offer, the White House did try to include some concessions to win Republican support. The new plan lessens the money available to boost broadband Internet nationwide, for example, seeking to bring its number in line with Capito’s plan. Along with changes to road and research spending, the Biden administration also said it could be open to discussing alternate financing mechanisms, including additional dollars that could leverage public-private partnerships on infrastructure.
But the efforts were not enough to assuage Republicans. A person familiar with the party’s thinking, who spoke on the condition of anonymity to describe the conversations, said the White House’s smaller price tag did not reflect much change at all, as the Biden administration sought instead to shift some of its proposed spending to other legislative packages, including one currently moving in the Senate.
“There continue to be vast differences between the White House and Senate Republicans when it comes to the definition of infrastructure, the magnitude of proposed spending, and how to pay for it,” Capito and her Senate colleagues later said in their statement. They added they would “further review the details in today’s counteroffer and continue to engage in conversations with the administration.”
A senior White House official stressed the offer represented a good faith negotiation to shave more than $500 billion off the administration’s initial package. Asked why the administration was not compromising on the climate change or home care provisions, which the GOP rejects, the White House official said the negotiations represent an opportunity to demonstrate policy priorities to the other side.
At the core of the dispute is a fight over what the term even means: GOP lawmakers suggest it should entail only “traditional” elements such as roads, bridges, pipes, ports and broadband, while the White House has taken a more expansive view that includes social safety-net spending. The debate has stymied progress repeatedly in talks over the last two weeks, vexing White House officials and Republican lawmakers most recently during a round of talks at the Capitol on Tuesday afternoon, according to those in attendance.
Even in areas where they do agree, GOP leaders have signaled little appetite for the size of the investments favored by the White House. And Democrats and Republicans have found themselves at an even greater impasse over how, exactly, to finance the final package. With broader talks underway, Sen. Mitt Romney, R-Utah, is working with other Republicans and some Democrats on assembling a potential compromise around funding.
Romney said Thursday that he had spoken with Commerce Secretary Gina Raimondo earlier that day, and his group – which includes centrist and deal-minded members of both parties – will meet Monday evening to discuss the proposal further.
“I think we have a reasonable proposal,” Romney said. “We’ll see if we can get support for it.”
Republicans, however, have labored to protect a series of tax cuts they see as a crowning economic achievement – and in recent days they have ratcheted up their opposition to Biden’s plan.
Exiting the meeting with Biden last week, Blunt said the party’s lawmakers made clear to the president directly that the 2017 tax law marks a political red line for them – and that Biden and his top aides in response “clearly understand that would be something” they could not support.
In its place, GOP leaders have proposed to raise or impose new fees on those who use infrastructure. That could include an increase to the taxes Americans pay when they fill their cars with gas, or new charges on those who own electric vehicles. But Democrats are sour on that plan, and the White House has indicated that it would violate Biden’s pledge not to raise taxes on Americans who make under $400,000 a year.
Some of the lingering tensions were on display as the Senate Finance Committee convened its first hearing to consider infrastructure financing on Tuesday. Republicans continued to maintain their support for user fees to finance infrastructure, even as Democrats including Sen. Ron Wyden, D-Ore., the committee’s chairman, say the money should come from corporations that currently “are paying nothing.”
“It would be hard to get members of Congress to agree on the proper way to butter toast, but I think everybody understands the importance of upgrading infrastructure,” Wyden acknowledged at one point in the hearing. “The tough question with respect to infrastructure is how you go about paying for it.”